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An Ultimate Guide to VED (Vehicle Excise Duty) Road tax in the UK

Updated: Jul 26, 2022

Do you have questions about the VED tax (vehicle excise duty tax)? This article will tell you how much you'll pay for your next car. The Vehicle Excise Duty (VED), also known as a toll, or road tax, can be confusing due to a number of factors since VED obligations and associated fees have become undergone significant changes in recent years.

Interest rates for 2022/23 were raised again to keep up with inflation. The last major changes came in April 2020, when calculations using Worldwide Harmonised Light Vehicle Test Procedure (WLTP) data for carbon dioxide emissions were first introduced. In addition, the surcharge for electric cars worth more than £40,000 has been removed.

Vehicle Excise Duty

How Much is My Road Tax?

It depends on when a car was registered: barring inflation, changes to the toll system(the road tax system) will not apply retroactively, so the system that applied when you bought a new car is and will always be in place. By the way, although the annual interest rates are subject to increasing inflation. If you buy a new car, you pay the road tax according to the latest system, introduced on April 1, 2017, and last corrected for April 2022 and beyond. When you buy a used car registered before April 2017, you pay the rate in effect at the time of registration, even if the car is still in production.

The first thing to know about the current toll system in the UK is that it is divided into two main rates. The first rate applies during the first year of operation of a new car and depends on the amount of carbon dioxide emissions. When a new car is on the road for a year, it switches to a different system; CO2 emissions are not an issue, but they do determine how much the car will cost when new. The first and second-year fees affect the performance of the car: electricity, conventional fuel or a combination of both.

The First-Year Road Tax Rate

The first year's road tax is included in a car's OTR Price and is based on carbon emissions. It ranges from £0 for zero-emission cars to £2,365 for 255g/km or higher models.

Previously, nearly all new single-band diesel cars had a higher first-year rate because the Treasury Department decided to raise the first-year rate for diesel cars that don't meet the "latest standards." In January 2021 it became a legal requirement for new diesel cars to meet the requirements of RDE2, so it is no longer an issue.

Annual VED Road tax Rate

The current annual fixed road tax is £ 165 (from £ 155 in the fiscal year 2021/2022). Alternative fuel vehicles (hybrids, light hybrids and plug-in hybrids) have an annual discount of £ 10, which means their owners pay £ 155 a year (up from £ 145 last fiscal year). Cars costing £ 40,000 or more (net of options) are subject to additional annual costs of £ 355 (up from £ 335 in the previous financial year) for five years.

This happens after the first year of CO2-based charging, so you pay the surcharge for two or six years of the car's lifespan. This means that if your car crosses the £ 40,000 mark, you will pay £ 520 a year (£ 510 for hybrids) for five years. Thereafter, the annual toll will return to £ 165 per tonne. year (£ 155 for AFV). All-electric cars are the only exception to this rule - they are completely exempt from this tax, as are fresh and annual tolls.

If you trade a car worth more than £ 40,000 for less than £ 40,000, you will still have to pay the surcharge as it is based on the price of the car for tax purposes. The £ 40,000 calculation also includes all trim options and levels and there is almost no way to avoid the extra cost.

It's worth noting that you can pay your taxes by direct debit on a monthly basis rather than annually. This will cost you a little more due to interest but is a useful option for those who want to defer payments. It also prevents you from mistakenly paying the toll as the DVLA automatically collects payments on a monthly basis. The DVLA should automatically cancel the direct debit if you sell or cancel the car, but it's worth checking if it arises.

The Following table shows VED for the cars registered after 2017:

​CO2 Emissions

​Petrol & Diesel Cars (RDE2)

​All Other Diesel Cars

​Alternate-Fuel Cars





















101- 110g/km




























Over 255g/km




Road tax in the UK

Where to Tax My Car?

At the Post Office

You can still tax your car at your local post office (a method we highly recommend if you want the lights on at your local OP). You must bring your logbook and the insurance details for your car.

Online On the DVLA Website

Visiting the DVLA Vehicle Tax Website is a quick, easy and effective way to stay legal. You fill in some information online and all you have to do is have your logbook or vehicle recovery letter to get a reference number to complete your application. The good news is that you can choose to pay monthly if you do it online, dividing the pain of major tax into 12 more manageable parts.

How to Check My Car Tax?

The DVLA website has an overview of all registered vehicles. If you have the vehicle registration document with the reference number, you can immediately check if it is charged or needs to be renewed.

How do I Cancel the Car Tax?

When selling your car, it is your responsibility to pass on the details of the new owner to DVLA. The car tax cannot be transferred between owners, but you will be refunded the full month of car tax that you have paid. You can also "cancel the car tax", terminate the insurance or have a SORN in the event of theft.

How to Pay the Car Tax?

Fortunately, paying for VED is a simple process. The best way to do this is to visit the website and then go to the page titled "Tax Your Vehicle". You will see a simple step-by-step procedure there - follow it and use a number reference from the V11 reminder letter "sent by DVLA".

You can also pay car tax at most post offices if you bring your V5C with you. In addition, the 24-hour tax office of DVLA can be reached via 0300 123 4321.

How Much is My Road Tax

Get Your Car Off the Road

If you don't need to use your car for a long time (anything longer than 6 months), you can use an Off-Road Notification Form (SORN) to avoid VED tax when not in use. But off-road means off-road - you can only declare SORN if you have off-road parking, garage, or another type of warehouse off a public road. Even if a car stays on the street for a long time, it has to pay a road tax to park there, so it must also have an MOT and insurance to get the VED tax at all.

You can file a SORN at any time if you have the V5C registration certificate, or the most common way is to let a SORN know when the DVLA Express Motor Vehicle Tax arrives by post. You can then use the 16-digit renewal code to confirm SORN. If the vehicle has a SORN, you will receive a written confirmation by email, but you will not receive an annual reminder of the vehicle's SORN status.

If you enter a SORN while there is still time for the current toll, you can collect the remaining amount, even if it only becomes a full monthly tax, i.e from the first day of the year months after the SORN report.

When you want your vehicle back on the road, simply drive the vehicle and your SORN will be cancelled automatically. The only time you can drive a SORNed vehicle is if you go to a pre-booked MOT time or other vehicle tests. If you drive it for any reason, you could be fined up to £2,500.

If you make a SORN statement on a vehicle that does not belong to you you must request SORN by e-mail. Email using the V890 form and fill in the relevant information along with the information required for the vehicle.

How to SORN (Statutory Off Road Notification) My Car?

If you are having the car but not driving it, e.g. In stock, you can't "cancel" your stamp, but you can also declare it out of the way by filling out a statutory Off-Road Notification Form (SORN) at your post office. or on the DVLA website. This means that you do not have to pay that year. But if you get it back on track, you'll need to remove it from SORN by replacing the loads using the same methods as above.

What Happens to Your Road Tax When You Sell Your Car?

In the current system, the VED tax is not charged when you sell your car to the new owner. Instead, the seller can get a toll refund on any remaining tax on the vehicle and the buyer must pay for the car review.

The tax refund on a sold car is sent automatically when DVLA receives notification that the car has been sold, destroyed, exported or taken off the road with an Off-Road Legal Notice (SORN).

Sellers are required to notify DVLA immediately of any change of ownership or to be fined £ 1,000. If not, they can also be held liable for speeding or parking fines by the new owner.

Information on whether or not to tax a car is available online on the national government website. All you need is the make, and model of the car plus the license plate number.



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